Harvard Business Review

OCTOBER 10, 2017

Even if executives try to prioritize it, innovation often gets crowded out by more “urgent” short-term pressures. For any business to succeed over the long term, it must earn a return that exceeds its cost of capital. Here are four things leaders can do. Don’t Get Trapped in Your P&L.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

DECEMBER 13, 2017

Some argue that profits are stagnant because of short-termism—that decades of focusing on current profits over long-run innovativeness has resulted, now, in companies that are hollowed out. Most attempts to combat short-termism are flawed because they focus on changing CEO behavior through some combination of pleading and incentives.

Short-term 8

Short-term Decentralization Company Trends 8

Harvard Business Review

NOVEMBER 25, 2013

To date, however, the reality of marketing analytics has fallen short of the promise. Just 36 percent of CMOs, for example, have quantitatively proven the short-term impact of marketing spend, according to the 2013 CMO Survey (and for demonstrating long-term impact, that figure drops to 32 percent).

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

MARCH 28, 2016

This was the era of the company man, where employees exchanged long-term loyalty for a livable wage and a pension plan. And given the pace of growth, capital was always in demand. Outside funds bring with them a pressure to achieve short-term results that trade-off with value creation.

Long-term 8

Long-term Short-term Reputation Incentives 8

Harvard Business Review

MARCH 31, 2015

While consumers are rightfully worried that their personal information may be compromised, shareholders and companies’ management have a wider set of concerns, including loss of intellectual property, operational disruption, decreased customer trust, tarnished brand, and loss of investor commitment.

Price 8

Price Long-term Banking Short-term 8

Harvard Business Review

MAY 4, 2012

As we saw again this quarter, earnings announcements can have significant impacts on stock valuations—at least over the short term. Less Volatility in Stock Price: The net effect of providing guidance is arguably a less volatile stock price, which can result in a lower beta and a lower cost of capital.

CFO 11

CFO Metrics Price Depreciation 11

Harvard Business Review

MARCH 10, 2011

With a record $2 trillion in cash and short-term liquid assets on hand, U.S. Many are deeply uncertain about which initiatives they should fund — and one root of this indecision is a general lack of confidence in the cost of capital projections they are using to make the call. What's holding them back?

Cost of Capital 12

Cost of Capital CAPM Cost Discounted Cash Flow 12

Harvard Business Review

FEBRUARY 7, 2017

Companies deliver superior results when executives manage for long-term value creation and resist pressure from analysts and investors to focus excessively on meeting Wall Street’s quarterly earnings expectations. We’ve seen companies such as Unilever, AT&T, and Amazon succeed by sticking resolutely to a long-term view.

Long-term 8

Long-term EPS Short-term Management 8

Harvard Business Review

JUNE 22, 2015

“It’s one of the more popular ways that managers calculate marketing ROI,” says Avery, pointing out that other common ones include calculating the investment payback period, calculating an internal rate of return, and using net present value analysis. What are some of the common mistakes managers make when using BEQ?

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

APRIL 2, 2014

Others, most notably money managers and former Fama students Cliff Asness and John Liew in an epic Institutional Investor article , have done a lot recent to clarify how Fama’s ideas and Shiller’s can at least co-exist peacefully. A lot of other stuff that looked at stocks and looked at short periods of time didn’t find much.

CAPM 8

CAPM Discount Price Finance 8